U.S. oil output and global oil demand will likely post bigger records this year than previously expected, the U.S. Energy Information Administration said on Tuesday.
The agency now expects U.S. oil output to grow by around 310,000 barrels per day (bpd) to 13.24 million bpd this year, about 40,000 bpd higher than its previous forecast in May. It expects U.S output to be around 13.71 million bpd next year, slightly below the previous 13.73 million bpd forecast.
Global oil demand this year is also expected to be above estimates, which were already forecast to hit record highs, according to the June edition of the EIA’s short-term energy outlook.
World crude oil and liquid fuels consumption is expected to rise by 1.1 million bpd to 103 million bpd this year, the EIA said. That compares with a previous forecast of around 102.8 million bpd.
Global oil demand will likely rise to 104.5 million bpd next year, the EIA said, slightly higher than its previous forecast of 104.3 million bpd.
The upward revisions to demand growth despite recent concerns of slowing consumption made the report modestly positive for oil markets, UBS analyst Giovanni Staunovo said.
Staunovo also noted the agency’s lowered world oil output forecasts for this year.
EIA now expects global oil output of around 102.6 million bpd, compared with its 102.8 million bpd forecast in May. The adjustment was made because the OPEC+ producer group announced plans to raise output from the fourth quarter onwards, while the EIA had expected the producer group to move sooner.
The slower increase in OPEC+ supplies should lead to a decline in global oil inventories through the first quarter next year and put upward pressure on oil prices, the EIA said.
(Reporting by Shariq Khan in New York and Liz Hampton in Denver; editing by Jonathan Oatis and Leslie Adler)